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The Federal Communications Commission (FCC) today voted to move forward with consideration of proposed new “privacy” regulations targeted at Internet Service Providers (ISPs). What follows is a statement by Center for Individual Freedom (CFIF) President Jeffrey Mazzella:

This latest effort by the FCC is nothing more than the Commission once again picking winners and losers in the marketplace. These regulations on ISPs do nothing to prevent the online data collection practices used profusely by others throughout the Internet economy, while constricting the development of new business practices and distorting the robust digital marketplace.

The prescriptive regulations voted on today also circumvent the Federal Trade Commission’s (FTC) expertise in this area. The FTC’s proven framework on privacy has worked to protect consumers for decades while encouraging the growth of the Internet we have today.

Rather than finding ways to cement the presence of FCC bureaucracy in our daily lives, the Commission should reconsider its regulations on so-called ‘privacy’ and instead focus on pro-growth solutions for a robust mobile marketplace.

In a letter sent today to Congress, the Center for Individual Freedom (“CFIF”) joined a coalition of more than a dozen national organizations in calling on Congress to “implement a regulatory budget to address the cost of federal regulations, which frequently have an effect similar to tax increases. Like federal spending, regulations and their costs should be capped, tracked and disclosed annually.”

CFIF strongly favors comprehensive patent litigation reform, in particular the Innovation Act that passed by a bipartisan 325-91 House vote in the last Congress. Venue reform constitutes one important part of that broader effort, which CFIF has also emphasized.

By way of review, current federal rules allow patent lawsuits to be filed almost anywhere, which in turn allows plaintiffs to file in districts where no defendant resides, where no substantial portion of the events in dispute occurred and where few if any relevant witnesses and evidence are situated.

As we have noted, one manifestation that of venue abuse problem is the preposterous overabundance of patent lawsuits in a single federal district – the Eastern District of Texas:

Since 2009 alone the total number of patent lawsuits in the United States has more than doubled from 2,500 to over 6,000 in 2014. And of that total, a preposterous 44% of new patent lawsuits last year were filed in a single federal court district, the Eastern District of Texas. Even more preposterously, one judge in that district – Rodney Gilstrap – oversees 900 cases and actually accounts for almost one-fifth of all patent lawsuits in the entire U.S.

Plaintiffs’ attorneys game the system by suing in the Eastern District of Texas for a variety of reasons, including its reluctance to allow transfer of cases to more appropriate districts, its prevalence of high ‘jackpot jury’ awards, its willingness to allow excessive document and witness discovery demands, its friendly verdict rate and its local court rules favorable to plaintiffs. The district is so notoriously welcoming that plaintiffs create artificial connections such as bogus offices and document warehouses for the sole reason of convincing judges to keep cases there.”

Their Venue Equity and Non-Uniformity Elimination Act (VENUE Act) of 2016 (S. 2733) would limit litigants’ ability to game the system and play “jackpot justice” when choosing the district in which to sue. Stated simply, the VENUE Act would now require plaintiffs to sue in districts more appropriate for the case in question and convenient for the parties and witnesses. No longer would plaintiffs possess almost unlimited ability to drive opposing parties to nuisance settlements by filing in faraway districts untethered to the parties or legal issues. Instead, patent lawsuits would be litigated in districts where defendants’ principle places of business are located, where the patent holders and important witnesses reside, where the evidence is more centralized or where the more substantial portion of alleged infringements occurred.

It should be noted that the VENUE Act would still allow parties to voluntarily agree amongst themselves to a particular district, so this wouldn’t constitute a one-size-fits-all mandate.

Although comprehensive patent litigation reform remains the goal, the VENUE Act advances the ball on this issue in an important manner. We therefore encourage our supporters and activists across the country to contact their Senators and express support for this important patent litigation venue reform bill.

In an interview with CFIF, Ambassador Francis Rooney, Former U.S. Ambassador to The Holy See, Author and Foreign Policy Expert, discusses recent terror attacks and explains that the United States is a nation at war, what should be done to limit the ongoing threats posed by ISIS and Islamic extremism, and other foreign policy current events.

In recent weeks we’ve highlighted a destructive new initiative by the Obama Administration’s Federal Communications Commission (FCC) to impose a one-size-fits-all regulation forcing cable TV set-top boxes to become artificially compatible with third-party devices. Translation: in the ever-evolving home entertainment market, where cable companies themselves are already moving from traditional cable boxes toward devices owned by individual consumers, the FCC remains mired in a 1990s mindset and wants to regulate accordingly. The FCC’s inexplicable proposal would freeze in place a technological state that is already outdated.

Check that. Perhaps the FCC’s behavior isn’t so inexplicable at all.

This morning, The Wall Street Journal editorial board highlights many of the concerns that we and others address, but notes in “Government by Google” that crony capitalism constitutes the underlying foundation of the initiative:

The Federal Communications Commission has proposed rules that would force television providers to create a universal cable-box adapter. This would hand over shows to companies – TiVo, Google – that would peddle programming as their own…

The new rule amounts to government-sponsored piracy in allowing TiVo and Google to broadcast programs that providers pay to distribute. Google wouldn’t have to abide by carriage agreements or pay licensing fees, which is one reason content creators are pushing back. The stealing would no doubt violate copyright. Some 30 members of the Congressional Black Caucus sent a letter to FCC Chairman Tom Wheeler saying the rule would relegate minority programming to channels rarely visited by viewers. Google prodded the supposedly independent FCC in 2014 to bust open cable boxes, and Chairman Wheeler followed orders. The tech giant wants to sell ads against poached content, mowing over cable commercials and crushing advertising competitors.”

The federal government can’t be trusted to control our healthcare industry, our free speech rights, our children’s educational options, our Second Amendment rights and so on. Why would control over our home entertainment choices or the constantly-advancing telecommunications industry somehow be any different?

The Journal concludes by noting another ominous element: the Obama Administration’s mad rush to impose the remainder of its to-do list as the sun sets on its tenure:

The FCC rejected a similar proposal in 2010, but now the Democratic majority seems committed to ramming it through before President Obama leaves office. Mr. Wheeler has already done great harm to his reputation by taking direction from the White House to regulate the Internet. He’ll do even more damage if he does the cable-box bidding of Google.”

Well said. Fortunately, a bipartisan Congressional consensus, the creative community, consumer groups and other elements stand ready to stop the FCC’s scheme at the legislative, judicial and regulatory levels. Its up to the American electorate justifiably disgusted by crony capitalism and stifling federal overregulation to support them.

In an interview with CFIF, Jonathan Wood, Staff Attorney at Pacific Legal Foundation, discusses the Professional and Amateur Sports Protection Act, as well as the constitutional questions surrounding the state by state discrimination in sports betting laws.

President Obama officially nominated DC Circuit Chief Judge Merrick Garland to fill Justice Antonin Scalia’s seat on the U.S. Supreme Court. The president dedicated a considerable amount of time during his announcement speech to make the case that Judge Garland is a “consensus” nominee.

But who is Judge Garland and how does he view the U.S. Constitution?

While much will be written and analyzed about Judge Garland and his judicial record in the coming days and weeks, Carrie Severino, a former clerk to Supreme Court Justice Clarence Thomas and Chief Counsel and Policy Director at the Judicial Crisis Network, provides some insight to help answer that question. In a piece for National Review’s Bench Memos titled “The ‘Moderates’ Are Not So Moderate: Merrick Garland,” Severino wrote last week:

Garland has a long record, and, among other things, it leads to the conclusion that he would vote to reverse one of Justice Scalia’s most important opinions, D.C. vs. Heller, which affirmed that the Second Amendment confers an individual right to keep and bear arms.

Back in 2007, Judge Garland voted to undo a D.C. Circuit court decision striking down one of the most restrictive gun laws in the nation. The liberal District of Columbia government had passed a ban on individual handgun possession, which even prohibited guns kept in one’s own house for self-defense. A three-judge panel struck down the ban, but Judge Garland wanted to reconsider that ruling. He voted with Judge David Tatel, one of the most liberal judges on that court. As Dave Kopel observed at the time, the “[t]he Tatel and Garland votes were no surprise, since they had earlier signaled their strong hostility to gun owner rights” in a previous case. Had Garland and Tatel won that vote, there’s a good chance that the Supreme Court wouldn’t have had a chance to protect the individual right to bear arms for several more years.

Garland is the chief judge for the United States Court of Appeals for the District of Columbia Circuit, a court whose influence over federal policy and national security matters has made it a proving ground for potential Supreme Court justices. …

Congressional sources spoke on condition of anonymity because Obama had not yet announced his choice. …

Obama planned to introduce his pick at 11 a.m. in the White House Rose Garden.

Right now, House Natural Resources Committee Chairman Rob Bishop (R-UT) is considering the creation of an unprecedented restructuring regime to address Puerto Rico’s debt crisis. This restructuring mechanism, proposed by the Obama Administration, goes far beyond the authority that states possess under Chapter 9 of the U.S. Bankruptcy Code by allowing Puerto Rico to stiff bondholders who now enjoy constitutional guarantees of repayment in favor of bailing out government pensions.

Such a blatant and dangerous violation of Puerto Rico’s Constitution is neither a credible nor conservative solution to the Puerto Rican debt crisis.

As multiple governors have noted in letters to Congress, the precedent set by such a “Super Restructuring” regime would have major consequences for states, including Utah. Borrowing costs would skyrocket for state governments, harming their ability to finance critical services and infrastructure projects, and the value of retirement funds that hold Puerto Rico and other guaranteed state bonds would plummet.

Perhaps even more alarming: If enacted by Congress, this plan could pave the way for a series of Puerto Rico-like events to occur across the country. If Congress demonstrates a willingness to rewrite bankruptcy rules to bail them out, high-spending, debt-ridden states will be even less likely to cut spending and balance their budgets.

CFIF’s radio ad urges all Utahns to call Representative Bishop’s office at (801) 625–0107 and tell him to protect taxpayers and bondholders by saying “no” to the Obama Administration’s “Super Restructuring” bailout of Puerto Rico’s bloated, irresponsible government.

In the accelerating debate over patent litigation reform legislation, opponents continue to mischaracterize it as “patent reform,” as if the bill would somehow reorder the system by which patents are granted, the duration of protection and so on.

Whether deliberate or simply careless, that’s simply untrue.

Patent litigation reform legislation, including the Innovation Act that we at CFIF most strongly favor, would reform how patents are litigated, not our patent system itself. And as Dana Rao, Vice President and Associate General Counsel of Intellectual Property and Litigation at Adobe Systems, details in The Hill, patent litigation abuse remains a serious problem:

The numbers are in. And they aren’t good. Patent trolls filed 3,604 suits in 2015, making it the second busiest year on record for abusive patent litigation. And if anyone had any doubt about the merit of those suits, the busiest filing day last year, by far, came one day before a court rule permitting vague complaints was set to expire. A record 212 patent infringement lawsuits were filed on November 30. That is nearly 18 times as many as a normal day. What kind of patent holder would scramble to file a suit to take advantage of this rule? A patent holder who knew their suit had no merit. These recent numbers reveal that court decisions and rule changes do not discourage abuse of our patent system. In the current system, trolls continue to bring frivolous suits in sympathetic courtrooms around the country. Only legislation will change these dynamics.”

The Innovation Act addresses that critical need for reform.

The Innovation Act targets patent litigation abuse by: (1) Forcing frivolous litigants who can’t demonstrate to the court that their “position and conduct … were reasonably justified in law and fact, or that special circumstances (such as severe economic hardship to a named inventor) make an award unjust”; (2) Changing pleading standards so that parties must state their allegations with greater clarity and specificity, instead of relying upon vague and summary allegations that offer little insight into the nature of their claims; (3) Reforming the pretrial discovery process (witness depositions, document requests, etc.) in order to reduce the oppressive burdens currently imposed on parties, often as a tactic to drive innocent parties to settle rather than vindicate their rights; and (4) Bringing greater transparency regarding true ownership of disputed patents.

Notice what the Innovation Act does not do: overhaul the patent system itself. Which is one reason why the bill passed by an overwhelming and bipartisan 325-91 vote in the last Congress.

So why do opponents continue to mischaracterize it as “patent reform?” Only they possess the certainty of their own minds to explain, but one suspects that it’s a ploy to frighten those of us who support strong intellectual property (IP) protections. But CFIF takes a backseat to no one in advocating strong IP protections, and we would not support any bill that threatened to undermine them.

Whatever their motivations or confusion, however, it’s important that elected officials, policy analysts and everyday Americans remain clear that patent litigation reform should not be confused with “patent reform.”

Five things Mississippi taxpayers should know and worry about the Gulf Coast “Fiber Optic Ring”

1) A new plan proposes to use a portion of Mississippi’s British Petroleum (BP) oil spill settlement to build a government-owned broadband network in South Mississippi. The network or “Fiber Ring” would, in theory, connect a dozen Gulf Coast cities across three counties. Local officials estimate that it could cost over $100 million.

2) So far, the state has promised $5 million of the BP funds towards the Fiber Ring, though it is not a fiscally sound proposal. In fact, there’s no indication of where the additional $95 million needed to finance this project will come from, but taxpayers will likely foot the bill.

3) Government-owned networks rarely succeed, and residents already have access to high-speed Internet provided by private companies. Competing with the private sector will only force taxpayers to subsidize a costly failure. Private Internet Service Providers (ISPs) already bring high-speed broadband to 97 percent of Harrison County residents, according to BroadbandNow.com.

4) When the government enters a broadband market, prices for consumers do not decrease. In fact, government-owned broadband networks have been found to charge consumers more than private firms, for similar services.

5) Other regions have tried (and failed) at building and running government-owned broadband networks. Here’s a look at some of the results:

Burlington Telecom, VT
Burlington Telecom was started in 2008 to provide telecommunications services to the citizens of Burlington, VT. The network floundered, and by 2014, it owed $33.5 million to Citibank. The city reached a final settlement in which it agreed to pay about a third of what was owed, and turned to the private sector for help financing the settlement.

Memphis Networx, TN
Memphis Networx was started as a public-private partnership by Memphis Light, Gas, and Water Division (MLGW) in 1999. By 2007, the network had failed and MLGW sold Networx to Colorado holding company Communications Infrastructure Investments for $11.5 million after losing about $28 million in public funds on the venture.

UTOPIA, UT
UTOPIA was started in 2002 to provide Internet services to 11 cities in Utah. The network’s initial capital investment was $135 million, and by 2014 the debt had climbed to $500 million. The cities involved have been looking for a private buyer to take over their network for several years.

CDE Lightband, TN
CDE Lightband was started in 2007 with a $16 million loan from the Clarksville Electric Power Board’s electric division to its broadband division. In 2009, the utility was approved to take an additional $4.5 million in loans to finance the network, leaving taxpayers and utility ratepayers on the hook for the debt.

Help CFIF spread the word. Email this link to your colleagues, friends and family members in Mississippi and/or share it on social media. To download a copy of CFIF’s educational fact sheet about the Gulf Coast “Fiber Optic Ring,” click here (.pdf).

We the undersigned companies and organizations write to urge you to promote a public policy environment in Canada that supports innovation and intellectual property (IP). Canada has a history of one of the most well-developed environments for promoting advancement of the arts and business through the defense of intellectual property rights, but we are concerned about current developments. Canada has begun to lag behind other developed nations in protecting and enforcing intellectual property rights, even though scholarly research shows that more than ever, the protection of such rights are key drivers for a country’s economic growth.

The letter proceeds to detail the value of IP to both the Canadian and American economies in terms of employment, investment, exports, research & development, consumer products and higher income jobs.

In addition, the letter alerts the Prime Minister to emerging threats to IP rights in Canada, including the proposed “promise doctrine.” That misguided and potentially dangerous proposal would essentially require inventors to see into the future and itemize the various utilities of an innovation when filing patent applications. Not only are such predictions impossible to accurately foresee, but they add uncertainty that threatens to stifle innovative efforts and investment for fear of no future reward due to bureaucratic whim. That is particularly true in the lifesaving pharmaceutical industry, where the effects are already being felt, as the letter details. The promise doctrine also contravenes NAFTA, WTO rules and international IP norms.

Because Canada remains America’s most important trading partner, we therefore ask Prime Minister Trudeau to remain vigilant in protecting Canadian IP rights and resist ongoing efforts to undermine them.

In addition to CFIF , other organizations joining the letter include the American Legislative Exchange Council (ALEC), Americans for Tax Reform (ATR), the Small Business & Entrepreneurship Council, American Commitment, Citizens Against Government Waste (CAGW), Frontiers of Freedom, Taxpayers Protection Alliance (TPA), the Institute for Policy Innovation (IPI), the National Center for Policy Analysis, Digital Liberty and the Property Rights Alliance.

The full letter, which was organized by the Property Rights Alliance, can be read here (.pdf)

Here is a trick question: What percentage of American households have incomes in the top 10 percent? Answer: 51 percent of American households are in the top 10 percent at some point in the course of a lifetime – usually in their older years. Those who want us to envy and resent the top 10 percent are urging half of us to envy and resent ourselves.”

Now 140 years later, the Obama Administration continues its counterproductive and legally dubious effort to regulate the Internet as if it were little more than an old-fashioned telephone service of the Bell variety. CFIF and other free-market groups have consistently opposed that effort, and courts have repeatedly rebuked the Obama’s Federal Communications Commission (FCC) various schemes to impose it.

Today, The Wall Street Journal’s “Information Age” columnist Gordon Crovitz details how a Senate committee has discovered evidence that the Obama Administration’s behavior in attempting to regulate the Internet as an old-fashioned utility violated the law. In fact, even FCC regulators expressed shock at the degree to which their administrative independence was disregarded:

FCC staffers cited nine areas in which the last-minute change violated the Administrative Procedure Act, which requires advance public notice of significant regulatory changes. Agency staffers noted ‘substantial litigation risk.’ A media aide warned: ‘Need more on why we no longer think record is thin in some places.’ These emails are a step-by-step display of the destruction of the independence of a regulatory agency… Mr. Obama’s edict resulted in 400 pages of slapdash regulations the agency’s own chief economist dismissed as an ‘economics-free zone.'”

Here’s why it matters in the real world, in terms of economics and innovation: Crovitz notes that in just one year since Obama’s edict was imposed, “regulatory uncertainty has led to a collapse in investment in broadband.” As CFIF has also detailed, he is correct in that unfortunate observation.

On a more encouraging note, however, Obama’s latest attempt to regulate the Internet in ObamaCare fashion is back before the same appellate court that has twice rebuked it on this issue. As Crovitz wryly observes, “The Senate report should make fascinating reading for the federal appellate judges considering whether to invalidate the regulations… The appeals court has plenty of evidence proving White House meddling with a supposedly independent agency.”

For the good of American consumers and continuing Internet innovation, we certainly hope so.

With cybercrime on the rise, CFIF’s Renee Giachino discusses why cybertheft of America’s intellectual property should be a kitchen table issue for all of us as it damages the broader economy and costs jobs.

In an interview with CFIF, Seth Cooper, Senior Fellow at The Free State Foundation, discusses what is wrong with the Federal Communications Commission’s proposed rule to “unlock set top boxes,” how it is going to impact programming and why the government should not be allowed to pick winners and losers.